Finance giant hungers for takeover growth

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Global corporate juggernaut GE is hunting for acquisitions to
add to its vast portfolio of Australian financial services as it
chases annual growth of at least 20 per cent in the slowing
Australian economy.

GE's Australian finance operations, GE Money and GE Commercial
Finance, have made at least one big purchase a year. After buying
AMP's real estate portfolio in 2003, and Wizard Home Loans in 2004,
GE is yet to make a big purchase this year.

Steven Sargent, chief executive for GE Commercial in Australia
and New Zealand, yesterday told The Age that GE's finance
operations were targeting growth of 20 to 30 per cent through
acquisitions, cost efficiencies and organic growth. Profits for
GE's Australian operations are not disclosed, and the company's
complex finances are difficult to dissect from compliance documents
lodged with the Australian Securities and Investments
Commission.

But Mr Sargent said GE had booked about 50 per cent net income
growth each year for the past decade in Australia, despite reports
that some operations had traded at post-tax losses.

Despite long-running speculation that GE would buy one of
Australia's rapidly expanding regional banks, such as St George or
Bendigo, Mr Sargent said it wanted to add to existing operations
rather than enter a new segment like deposits.

"We'd like more of what we already have," he said. "But we are
smart buyers; we don't buy if it doesn't make sense and we're very
disciplined buyers. It is just part of the way we go about growing
our company."

Australia is the fifth-most-profitable country for GE, the
world's biggest non-bank financial institution, with a global reach
of 147 countries.

Mr Sargent, who started his career with Westpac, joined GE in
1993.

Mr Sargent said Australia's big banks were just as formidable
competition as any of the old banks of the US, Britain and Western
Europe.

He said the end of the "four pillars" system was inevitable if
Australia's banks were to maintain growth.

"If you look at it from an economic perspective and a business
perspective, I think the answer is yes, I think we need to end it,"
he said. "I don't think (the four pillars) will get moved in the
short term, but it is the right thing to do."

He said the Big Four had the capability and capital for
large-scale international expansion but had been hindered by their
cautious Australian shareholders.